Market Observations
- U.S. venture capital funding surged during the first half of 2024, reaching $15.8 billion, and is on pace to surpass last year’s total volumes.
- Life science M&A activity reached $62.0 billion through the second quarter of 2024, which is roughly half of the year prior’s total.
- Amid labor market headwinds average monthly gains have given way to losses. With that, R&D employment is trending more positively.
- Big pharma continues to dedicate more revenue to research & development efforts, which bodes well for future growth.
- The Bay Area and San Diego are driving modest demand growth, but tenants remain cautious and are leasing less space for shorter terms.
- Vacancies continue to rise across most major markets, with roughly half of the ley clusters boasting vacancies above 20.0%.
- Despite nearly doubling in five years, asking rents are correcting materially in many major life science markets.
- Following three quarters of record levels of deliveries, new purpose-built construction is moderating quickly.
- Increased use in weight loss drugs has promoted several pharma companies to expand their domestic manufacturing capacity.
